Valuation mistakes in family law cases are often the same, no matter the venue

Last Sunday at the AICPA National BV Conference, Nicholas San Filippo (Lowenstein Sandler PC) informed the audience that the legal standards in oppression cases and valuation cases not only vary across states but are different within each state for the type of entity involved. “The distinctions are important, so when you interface with counsel you need to protect yourselves to make sure you understand what the parameters so you don’t get caught short.“

“Because valuation is not an exact science and there is no one right answer,” added Nicole Bearce Albano (Lowenstein Sandler PC), “the trial court or jury has the critical role of making the factual findings necessary for valuation. These findings are typically afforded ‘great deference’ and will be upheld unless they are clearly erroneous or an abuse of discretion.” In addition, expert testimony is often significant to the courts.

San Filippo, Albano and Robert Reilly (Willamette Management Associates) discussed over a dozen pitfalls made by testifying valuation experts in business divorce cases, including:

Failure to define the standard of value (judges have wide latitude here) or using an inappropriate standard of value.

Failure to disclose sources of information contained in the valuation process.